Essential, the start-up owned by Android’s co-founder, Andy Rubin, had been working on an upcoming smartphone and were teasing a launch since start of this year. However, new reports from Bloomberg says that Essential has terminated plans to develop a new phone and that Rubin is considering selling the entire company.
Although the new smartphone has been cancelled, Essential is still planning to launch some products in the future. The engineers earlier assigned to the development of the phone are now working on a smart home product, which is expected to be released next year. It could be the Essential Home that was announced a year ago to compete with Google Home Mini and Amazon Echo.
According to Bloomberg, Essential isn’t entirely leaving the phone business, it’ll just not be designing devices itself. It is reportedly going to contract Foxconn to handle the phone development.
The decision to cancel the new phone can be contributed to the poor sales of the first and the only phone launched by them last August, the PH-1. Although, the PH-1 was a good phone with a very innovative design, it had its fair share of problems that had to be fixed by software patches and was known for having a bad camera. It sold only 150,000 units since it went on sale last year at a price of $699.
According to the report, Essential had invested over $100 million into developing its first phone, and had raised over $300 million from investors. A year ago, the company was valued at between $900 million and $1 billion.
Although the talks of sale are still in very early stages. If it actually happens, Essential is reportedly going to sell everything including all the patents, hardware, upcoming products with the existing employees being absorbed by whatever new company buys it.
This just shows how competitive the phone market is and how difficult it is to stand out and survive here. It’ll be interesting to see how this situation works out for Essential and if we’ll ever see a new phone from them.